Two signs of the economic times rolled out Thursday. Seven Illinois communities, including Springfield, had the highest unemployment in 18 years for July, and a group of national, state and local Realtors touted a new federal tax credit for first-time homebuyers as a badly needed jolt for the housing market.
Two signs of the economic times rolled out Thursday.
Seven Illinois communities, including Springfield, had the highest unemployment in 18 years for July, and a group of national, state and local Realtors touted a new federal tax credit for first-time homebuyers as a badly needed jolt for the housing market.
The Illinois Department of Employment Security concluded the national slowdown has “fully impacted” the state job market.
“While many areas throughout the state continue to experience stable or moderate job growth, local economies cannot provide enough opportunities to prevent increases in unemployment (caused) by national economic uncertainties,” agency director James Sledge said in the latest report.
Springfield-area unemployment, which includes Sangamon and Menard counties, was 6.5 percent in July compared to 6.1 percent in June and 4.9 percent in July last year. It was the highest rate for the month since July 1990.
Bloomington-Normal, Champaign-Urbana, Kankakee-Bradley, Lake County, metro East St. Louis and Rockford all set 18-year highs for the month. Unemployment also increased in Chicago, the Quad Cities, Danville, Decatur and Peoria.
The slow housing market was on the minds of real estate industry representatives who called a teleconference to promote a one-time tax credit of up to $7,500 available to first-time homebuyers as part of a housing-relief bill recently signed by President Bush.
Many of the specifics for claiming the credit have yet to be worked out, but the tax counsel to the National Association of Realtors said the incentive would be available for the 2009 tax-filing season.
“The important thing to remember is that a tax credit reduces dollar for dollar your tax liability,” Linda Goold said.
Under provisions of the law, the credit must be repaid and cannot be used toward a down payment, but Goold said interest-free repayments would not begin until 2011 and could take up to 15 years.
“What it amounts to is an interest-free loan,” she said.
Capital Area Association of Realtors president Phil Chiles said the local office already has begun fielding calls about the tax credit. He added that he is hopeful the credit will convince hesitant buyers to jump into the market.
“It’s definitely going to help. Time will tell if it’s sufficient, but I do think it’s a real incentive to first-time buyers,” he said.
Springfield-area homes sales were down 15.3 percent through the first half of the year compared to 2007.
The amount of the tax credit is based on an applicant’s income. Buyers with income up to $75,000 a year are eligible for the maximum $7,500, with the incentive gradually phased out up to $95,000.
A first-time buyer is defined as someone who has never owned a home or has not owned a home in the last three years. The credit is available on homes purchased between April 9, 2008, and June 30, 2009.
Chiles said local real estate groups would distribute information on the program to potential buyers. Information also is available on the national association Web site, www.realtor.org.
Tim Landis can be reached at (217) 788-1536 or email@example.com.
Illinois unemployment rates July 2008-July 2007
Springfield: 6.5, 4.9
Bloomington-Normal: 5.6, 4.1
Champaign-Urbana: 6.4, 4.8
Chicago: 7.5, 5.4
Danville: 8.6, 6.8
Decatur: 7.9, 6.3
Quad Cities: 5.1, 4.1
Kankakee-Bradley: 8.6, 6.2
Lake County: 6.6, 5.0
Peoria: 6.0, 4.8
Rockford: 9.0, 6.1
Metro East St. Louis: 8.1, 6.0
— Source: Illinois Department of Employment Security